Scott Ryan (President, Special Minister of State) Share this | Link to this | Hansard source

I inform the Senate that, at 8.30 am today, five proposals were received in accordance with standing order 75. The question of which proposal would be submitted to the Senate was determined by lot. As a result, I inform the Senate that the following letter has been received from Senator Hanson:

Pursuant to standing order 75, I give notice that today I propose to move "That, in the opinion of the Senate, the following is a matter of urgency:

"The need to restore the international competitiveness of Australian manufacturers by reducing electricity prices."

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

It is. I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

The federal government will be remembered for its monumental failure to provide reliable—

Scott Ryan (President, Special Minister of State) Share this | Link to this | Hansard source

Senator Hanson, I've been advised that I need you to formally move the motion.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Sorry; I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need to restore the international competitiveness of Australian manufacturers by reducing electricity prices.

Scott Ryan (President, Special Minister of State) Share this | Link to this | Hansard source

Thank you, Senator Hanson. You can now address the motion.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

There is a need to reduce electricity prices so Australian manufacturers can be competitive. The federal government will be remembered for its monumental failure to provide reliable, continuous and internationally competitive electricity and gas prices. There is no mood for forgiveness in the electorate. The next election will be a bloodbath. The small number of Liberal and National candidates who win a seat will be huddled together on the opposition benches. It's the only way they will keep warm.

Queensland, more than any other state, is dependent on electricity because it is uncommon for gas to be used for heating or cooking. Consequently, Queensland households and businesses feel the pain of high electricity prices more than those in any other part of Australia.

Malcolm Turnbull claims his electricity plan will cut household bills by between $100 and $155 a year, or $2 a week. This is a joke, when households are paying $2,000 a year and more for electricity. Australia needs electricity prices which are comparable to those available to manufacturers overseas. We regularly pay more than $100 per megawatt for electricity. That is twice or three times the international competitive electricity price. Electricity which costs more than $45 a megawatt, including transmission and distribution, makes Australian manufacturing uncompetitive. Australian coal-fired power stations can produce electricity in the range of $8 to $32 a megawatt, making it possible to provide electricity at globally competitive prices. But these old faithful power stations are being phased out and they are not being replaced, because of the belief that carbon emissions are causing climate change. Some scientists say climate change is caused by burning fossil fuels, and others say we are experiencing a natural warming cycle. But, before the science is clear, we must decide whether to destroy our manufacturing and agricultural industries. Even if Australia ceases all man-made carbon emissions today, it would make no difference to the world, because China, India and the United States plan to continue to burn fossil fuels.

It is just too easy to move our manufacturing to countries that have what we do not—and I am talking about reliable, continuous and globally competitive electricity prices. All the polls say we will have a Labor government soon. But be warned: Labor is without a plan to reduce electricity prices to globally competitive levels. In Queensland, the Labor government wants to have 50 per cent of power coming from renewable schemes by 2030. But let's look at the cost, because they range from $100 to $800 a megawatt-hour to produce. These renewable sources are intermittent in their generation and do not provide the continuous supply required to support manufacturing and agriculture.

As I have already said, the price of electricity needs to fall below $45 a megawatt hour if we are to maintain and further attract manufacturing in this country. The government's solution to the crippling electricity price is to introduce the National Energy Guarantee, the NEG, to the National Electricity Market, the NEM. The NEG simply obliges retailers to guarantee supply and emissions, but there is no price promise. Twenty years ago, the National Energy Market did not exist, and individual states had their own generators, transmission lines and means of distribution. Under this arrangement, real electricity prices fell continuously between 1955 and 1984.

During this period, manufacturing thrived in Australia and we attracted energy-intensive industries, including steel, aluminium and fertilisers. Today, these same energy-intensive industries are leaving us and taking with them thousands of jobs. This government would like to tell you that our labour costs are too high, that our future is in service industries and that we need to work smarter. But I'm here to tell you that it won't matter how smart we work if we cannot deliver to business and households globally competitive gas and electricity prices.

The manufacturer of aluminium in Australia is, indeed, the canary down the coalmine. One electricity price caused this industry to move offshore, and the balance of our manufacturing will be in danger of doing the same. I am a Queensland senator, and there's no way I am going to look the other way while manufacturing jobs are lost in Queensland. The Boyne aluminium smelter, located south of Gladstone, was built in 1981 following the negotiation of a long-term electricity contract to provide electricity every minute of every hour for 30 years. Later, the Boyne smelter owners bought their electricity supply from the Gladstone power station. But, in 2016, the smelter could not acquire additional electricity, so they cut production and announced job losses. These jobs meant everything to the people who relied on them, but their families were not the only ones to suffer; many other jobs indirectly associated with the smelter were also lost.

Two other Australian aluminium smelters have closed recently, one in New South Wales and one in Victoria, because they could not find long-term electricity contracts at globally competitive prices. I don't want to see the only aluminium smelter in Queensland close because politicians will not solve the problem of uncompetitive, high electricity prices. Electricity represents 40 per cent of the cost of producing aluminium, which is high compared to the Australian manufacturing average of around nine per cent. But when the electricity price stops products being made or grown in Australia, the government needs to act decisively.

Agricultural businesses also use huge amounts of electricity to irrigate and keep produce cool. Farmers have repeatedly shared their concerns about electricity prices with the Australian Labor Party, but they have been ignored. There is no point in the government bragging about free trade agreements that open up markets if electricity prices mean Australian products and produce are too expensive to be sold in these newly opened markets. Rapidly escalating energy prices, like the ones we have seen in the past year, are a death sentence for manufacturers in Queensland. The economic argument that high prices breed efficiency is rubbish if you go out of business before you can develop those efficiencies.

We don't have much time to save manufacturing in Queensland or anywhere else in Australia. One Nation is a small party with limited influence, but in Queensland One Nation has a plan to cut electricity prices and keep them that way. My four-point plan is to build a new coal-fired power station in Queensland to ensure we generate electricity at a globally competitive price; write off billions of dollars spent on gold plating the transmission network, which will immediately drop electricity prices; negotiate the removal of the GST from electricity bills; and end excessive margins made by energy retailers.

It is a disgrace that each year 22,000 Queensland households have their electricity disconnected for failure to pay. That is a shocking 430 households a week. These electricity bills should never have been so high in the first place. It is a little-known but well-documented fact that the state government of Queensland sets the electricity price in Queensland. So, if you have been disconnected or stressed paying electricity bills, I recommend you put Labor last on 25 November in the Queensland state election. Labor, with its ideological but not scientific devotion to green energy, is prepared to throw manufacturing jobs under the bus for government. It's a tragedy.

If the next Queensland government follows my prescription, it is going to have to give up its debt habit and learn to manage its budget. I want the savings from lower electricity prices left with households and businesses. Families and businesses know how best to spend or save money from lower electricity bills. Wake up Australia: take your power back and vote for candidates who can explain to you how they are going to lower electricity prices and bring manufacturing back to Australia.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I could be a little cheeky and echo Senator Hanson's words, 'Vote for candidates who will reduce electricity prices in my home state of Queensland,' but I would mean, 'Vote for the LNP candidates,' because that's exactly what they will do.

I want to congratulate One Nation for raising this real matter of urgency. Too many times in this chamber we have urgency debates about ridiculous topics that the Greens and the Labor Party dream up, but I thank One Nation for raising this very important issue. I have to say that the idea of reducing electricity prices to help the competitiveness of Australian industry is a good one but not a new one. I well remember that in Townsville, where I'm based, almost 20 years ago—it may even have been 30 years ago—when there was a Liberal government in power in Canberra, we worked hard to encourage Korea Zinc's subsidiary Sun Metals to set up a zinc refinery, and one of the attractions we proposed to this significant Korean company was cheap power, which Australia had 20 to 30 years ago. They were looking at setting up in Korea or in Queensland. I remember that the Hon. John Moore was the business minister who negotiated this deal. There was cheap power in Queensland, so Sun Metals set up there. The cheap power, of course, was because in Queensland we are blessed with high-quality coal that produces good electricity cheaply, and that's why Korea Zinc came there. Over the years, with Labor Party interaction at both state and federal level, the prices of electricity have gone up and up and up, to the extent that I'm sure that Korea Zinc and Sun Metals now wish they had never heard the word 'Australia', because they are struggling to maintain the 300, 400 or 500 people that work at that plant in Townsville, because of the cost of electricity.

It's not just the renewable cost. The Labor Party in Queensland have actually been gouging the electricity prices to prop up their own budget. How can they gouge the price? Well, that's easy: they're the only ones who own the generators in Queensland. So, if the state budget is a little bit shy in any year, they just whack up the price of electricity. Don't worry about the jobs in Townsville. Don't worry about the jobs elsewhere in Queensland.

Whilst I respect what Senator Hanson says about her party, can I tell you that the LNP in Queensland, of which I'm a member, don't just have promises; they have a track record. They were the ones who, in government, froze household tariff 11 for one year, saving the average household $120 a year. They were the party who, in government, opposed the carbon tax, saving an average Queensland household $170 a year. They were the ones who reduced wasteful expenditure on the network infrastructure, which Senator Hanson mentioned, which would have increased electricity prices by some $7 billion. They were the government that closed Labor's Solar Bonus Scheme, which was expected to cost Queenslanders around $3.4 billion by 2028. They were the ones who maintained the uniform tariff policy to ensure that regional Queenslanders like me don't pay more for electricity than people in the south-east. They also capped prices on obsolete and transitional tariffs at 10 per cent to support Queensland farmers and businesses, and they exposed Labor's secret plans for the government network business to jack up prices, which would have resulted in even higher prices.

I want to say that, whilst I agree with much of what One Nation says, One Nation are not blameless themselves. APPEA have said:

In a miracle of economics, One Nation claims that it will bring gas prices down by banning gas production across most of Queensland.

Perhaps this is an outdated thing, Senator Hanson; perhaps you have a different policy now. But certainly this was your policy on 5 October. You can't reduce prices if you are restricting the flow of gas into the grid and into electricity generation within Queensland and elsewhere in the nation. So One Nation are not blameless in this. But, if that's wrong, Senator Hanson, you or one of your colleagues might clarify that later in this debate.

GetUp! people or union people invaded my office last Friday to give me a petition, this time on Manus. Fortunately when they were there I was in Papua New Guinea doing real work, so I don't know why they were hoping to give me a petition when I was in another country working for Australia. The guy who was arrested there—I've never met him or seen him or heard of him, but he's clearly a GetUp! person or a union man—has a letter in today's paper saying, 'All these renewable energy projects around Townsville will mean the difference, and it's not costing the taxpayer anything; it's all privately funded.' We all know that is absolute rubbish. The subsidies that go into renewable energy are just incredible. Huge subsidies go into renewable energy, which someone has to pay for, and it's the Australian taxpayer.

Unfortunately, former Senator Roberts is not here. I used to like his forensic examination of these issues. He and I keep asking the Greens, 'Okay, so you want renewable energy to reduce carbon emissions from Australia so we'll save the Barrier Reef?' I keep asking the Greens to answer this. None of them ever will. Australia emits less than 1.2 per cent of the world's carbon emissions. So, if it's carbon emissions that are killing the world, only 1.2 per cent of those emissions are from Australia. The Labor Party have promised to reduce our emissions by 50 per cent. Fifty per cent of 1.2 is 0.6. I once asked the Chief Scientist in estimates: 'What impact will it have on the world's climate if we reduce our emissions by 1.2 per cent?' and the Chief Scientist said, 'Virtually none.'

The Greens and the Labor Party, with all of this renewable energy, will destroy Australian industry—and Senator Hanson mentioned that very clearly in her address—and make costs so expensive, not just for manufacturing but also for each household. And what impact will that have on the world's climate change? Absolutely none, according to the Chief Scientist. The Greens are hell-bent on reducing Australia's output of carbon. According to the Parliamentary Library, the number of power plants that Australia has commissioned in recent years is 73 units. At the same time, China have increased their output by 2,107 units, and India by 877 units. I repeat: Australia, 73; China, 2,107; and India, 877. All this rhetoric you get from the Greens to make you feel warm and fuzzy—'Yes, we're going to reduce our carbon emissions'—will make absolutely no difference to the changing climate of the world, but it will destroy jobs. It has destroyed jobs in Australia, and it does make it more expensive for Australians to live.

In the last few seconds remaining to me, I can give the Greens some good news: the Australian Institute of Marine Science and GBRMPA are doing research and are now working on making coral resistant to bleaching—not that any coral bleaching is the fault of Australia; it might be the fault of the world, but it's certainly not the fault of Australia. Our scientists have taken a proactive, positive approach and are developing corals that are resistant and that are continuing to grow.

Thank you for raising this matter, Senator Hanson. The Greens hypocrisy and mistruths are becoming more and more obvious as each day passes. (Time expired)

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Woe is me, for my sins in a previous life, that I get the opportunity to follow Senator Hanson and Senator Macdonald in this chamber once again! But we're here to discuss the need to restore international competitiveness of Australian manufacturing by reducing electricity prices. At the heart of all of this, there is a lot of ideology. If we're serious about reducing electricity—

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

Let it go!

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I'm getting some Frozen references thrown at me—

Senator McKenzie interjecting—

Oh, I thought you were saying 'Let it go' in terms of the cooling of the planet. I thought that's where you were heading. I thought we were heading down that path.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Dastyari, ignore the interjections.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

There's ideology at stake here, because, if we're serious about reducing electricity prices, the one thing that is more important than anything else is providing a level of certainty to industry so that they're able to provide supply. What you have is such a level of uncertainty in what is going on that it is making it difficult for business and industry to make decisions.

One of the fortunate things that we're able to do as senators—and other senators have had these opportunities too—is, through the committee process, to go out and see different parts of Australia and talk to different communities. The Senate Environment and Communications References Committee, which I am a member of, held an inquiry into these matters last year regarding, specifically, the power station at Morwell, which had just announced it was shutting down. It gave us an opportunity to go out there and talk to the workers, specifically, and to the industry and others behind it. Putting aside what I think was some pretty reprehensible behaviour by the French company and how they made those decisions, when we had the opportunity to talk to the other companies that came before us, what they all spoke about was the need to have a level of certainty when they were making investment decisions. Regardless of where you sit ideologically in relation to the debate on renewable technology, what they were saying was they needed to have certain lines drawn in the sand so they could make investment and business decisions based on them.

The government, however, is held back by its own ideological debate and ideological fights on these issues. The Turnbull government is beholden to what can only be described as a far-Right element of their own party. Their latest plan restricts growth in renewables to as little as 28 per cent of Australia's energy by 2030, including rooftop solar. The current renewable energy target will deliver 23.5 per cent by 2020. The government's plan for renewable energy will mean renewable energy will grow by less than 0.5 per cent per year over the next decade, or 250 megawatts a year to 2030, given demand is projected to be flat. When you have the opportunity to have a growing renewable energy sector, surely that is where investment should be directed.

The renewable energy industry is booming across the world, creating hundreds of billions of dollars of investment, great research and development and, across the world, 9.8 million jobs, but what we've seen is this government, under Prime Minister Turnbull, turning its back on the renewable energy sector and embracing an old-school vision of a coal-fired future for Australia. With all the rhetoric about innovation, jobs and jobs of the future, if jobs in the renewable energy sector aren't jobs of the future then you really have to ask yourself: what are? Already the Abbott-Turnbull government has destroyed one in three energy jobs in Australia based in the renewable sector, and the plan that was recently announced—the NEG, or whatever you want to call it—will destroy thousands more.

The conservatives dream of a time in Australia when manufacturing in Australia was at its strongest, yet their policies are actually what's bringing manufacturing to its knees by putting so much uncertainty into the market that electricity prices are going to rise. Under the Prime Minister, power prices will keep going up and up, and thousands of jobs in renewable energy and with gas-intensive manufacturers are now at risk. Australia's industrial gas customers have seen no price relief from the Prime Minister's 'gentleman's agreement' with LNG gas exporters, and no export control means the government's gentleman's agreement—this cup of tea; this relationship they believe they've built—isn't actually backed up by anything. There's no legal mechanism at the heart of this, and so gas exporters are free to export gas that could otherwise be used to increase supply and lower prices here in Australia.

For years, Aussie manufacturers have had ready access to cheap and renewable energy suppliers which provided Australian firms with the competitive advantage they needed to compete globally. This is an advantage that has now disappeared. In October the outgoing CEO of BlueScope Steel, Paul O'Malley, told the company's AGM that from 2016 to 2018 BlueScope's energy electricity cost would rise by 93 per cent. The enormity of a rise like that on industry is staggering. In August, it was reported that steel company Milltech's electricity bill had blown out by 160 per cent, which actually related to $1.2 million. Chief Executive of the Australian Chamber of Commerce and Industry, James Pearson, has said that the surge in energy costs has forced business to defer investment decisions, with some even thinking of moving abroad.

Australian gas users are once again at the mercy of gas exporters and will continue to pay the price for the Turnbull government's failure to stand up to the big gas exporters. If you look at the government's own regulatory impact statement, it advised that this kind of agreement—this gentleman's agreement or whatever you want to call it—with gas exporters, will 'result in some users exiting the market, resulting in a loss of jobs and economic output'. That is the government's own statement. As it stands, the Turnbull government's latest energy policy thought bubble will strangle the renewable energy industry for perhaps a lousy 50c in three years time. Minister Frydenberg and the Prime Minister can't even guarantee a figure as low as 50 per cent; that's just what has been predicted by others. So, really, at the heart of it is an issue that the government has about certainty and providing certainty.

But it's not just on the issue of electricity that we have seen this ideological debate play itself out; we have seen it play itself out elsewhere. I note that Senator Macdonald was given a little bit of leeway in this debate, and I will take that leeway too. There is an ideological challenge that drives this government on every issue. Take the issue of marriage equality. Australians have now given their opinion through the postal survey; yet there are those in this argument who, just as they are doing with energy and just as they are doing with energy prices, are using ideology to try to drive an agenda. What Senator Paterson has proposed to put in this place is as dangerous as this energy policy that we're here to discuss today. It's not about ensuring equality; it's about ensuring discrimination and taking Australia back 60 years. What you now have are the young fogies of the Liberal Party being led astray by the old fogies. Australians have had their say to make our country a fairer and more equal place, not to take us back to a time where people could be denied service at a shop. The majority of parliamentarians need to respect the outcome of the postal survey when it comes down this week. What I would hate to see is those who oppose marriage equality try to take some kind of a possible 'yes' victory in the postal survey as a basis for more discrimination or as a basis to make a case against equality. That is not the question of this survey and that is not what the amendments should be. Frankly, Senator Paterson should know better than to be led astray by the old fogies in his own party.

Ideology on the conservative side of politics has led to increasing uncertainty when it comes to those who need to make investment decisions as it relates to energy prices. Until this government is able to get itself straight and in order on what it wants to achieve on energy, it is not going to be able to place the downward pressure on prices that is needed to protect and keep Australian manufacturing and jobs.

Andrew Bartlett (Queensland, Australian Greens) Share this | Link to this | Hansard source

Before I commence, I would like to clarify that this is not my first speech. The Senate is debating today the very important issue of the need to reduce electricity prices. That is something that I expect everybody in this chamber agrees on, but the key point is how we reduce electricity prices—and we certainly don't do it by sloganeering and we certainly don't do it with the economically illiterate arguments that we've heard from some in contributions to the debate thus far. The simple fact is that the people of Australia, including the people of Queensland, my home state, are being ripped off—they are being ripped off by massive corporations like Origin and AGL in my own state of Queensland, and they are being ripped off by the two establishment parties that have put in place the energy and electricity regimes across the states that have led to massive price gouging, that have led to these price rises and that have led not just to increased costs for manufacturing, which is referred to in the proposal before us today, but also to increased costs for households.

Let's not forget that in the last financial year the state government of Queensland made $3 billion from the profits made by state-owned energy corporations, straight out of the pockets of Queensland households. Leading into the state election—we released our policies on this two months ago—the Greens are proposing to put that money straight back into the pockets of Queenslanders. Origin and AGL made $7.2 billion in profits. Those are profits for corporations, and that is profits being put before people. That is the energy regime that has been put in place by Labor and the LNP over successive governments in my home state of Queensland over the last decade. Since Queensland Labor privatised electricity retail in 2006, prices have doubled. Retail charges are now 35 per cent of power bills. The Greens' approach is to roll back Labor's privatisation, to end that price gouging, and to invest in renewable energy.

We hear the economically illiterate and ludicrous approach that we need to build new coal-fired power stations in northern parts of Queensland, which will take 10 years to build—as though that will somehow make energy cheaper rather than more expensive. I had an email from a constituent from Gladstone today. Gladstone, as some may know, has the largest power station in my state of Queensland. It has almost unlimited amounts of gas, if they wanted to tap into it, going through the port of Gladstone and yet the prices are sky-high. It is simply a factor of the privatised, corporatised electricity generation, distribution and marketing regime that has been put in place by Labor and LNP governments following the bidding of their corporate donors. That is what we need to reverse and that is the thing that will reduce electricity prices by substantial amounts, not just for a year or two by way of a subsidy but for year after year after year by reversing the privatisation that occurred before, legislating to make reliable, affordable energy for all Queenslanders something that the government is required to provide. That is what we need to do and that is the approach the Greens have put forward for the Queensland state election. Independent economists, independent energy experts who have examined the Greens' policies, agree that that would lead to savings of at least $600 a year for each and every Queensland household. If we scrapped private electricity retailers and created a single public retailer with a legal mandate to provide affordable and reliable electricity to all Queenslanders, they would each save $600 a year on their electricity bill.

The same sorts of savings would apply to manufacturers in Queensland as well. The jobs would flow on from that. Investing in renewable energy would create over 5,000 jobs a year every year for five years. The Liberal and Labor parties in Queensland want to create a ridiculous, unsustainable mine that would deliver maybe 1,500 jobs and would take all of the investment money that could otherwise be put into renewable energy that would generate over 5,000 jobs year after year after year and create cheaper electricity along the way. They are the visions and the policies that the Greens are putting forward in the state election in Queensland and that is the guaranteed way to get cheaper electricity for all people across this country.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

It gives me great pleasure to stand up as a senator from the great manufacturing state of Victoria and talk about the need for reliable, affordable access to energy in this country right now. Unfortunately, as I sat in the chamber and listened to Senator Dastyari, I didn't hear a lot about the ALP's energy policy. I didn't hear a lot about the promotion of a 50 per cent renewable energy target. I didn't hear about the impact of Premier Weatherill's energy policy on his home state of South Australia. I didn't hear a lot about the impact of Daniel Andrews' policy on my home state of Victoria. And I didn't hear a lot about Bill Shorten's energy policy. But one thing I can be sure of from the noises we have heard from the Labor Party about this particular area of policy endeavour is that they have nothing. What they are pursuing is vanity. It is vanity to chase an international target to be seen as do-gooders on the international stage while there are over 950,000 men and women in this country who work hard every day at manufacturing in regional towns, in Melbourne proper and in the northern suburbs and western suburbs of Sydney. There are 950,000 Australians in manufacturing jobs, and they rely on reliable and affordable access to power.

It's great to see Senator Kim Carr in the chamber, a great champion of the manufacturing industry. But I do note Senator Carr is not on the speaking list, because he knows that advanced manufacturing, something he has championed as long as he has been shadow minister and as minister prior, requires access to affordable and reliable energy sources. He knows that there is no use standing up and talking about the Labor Party's energy policy, because they ain't got nothing. He also knows the costs of blackouts, particularly to manufacturers.

The Turnbull government have been delivering in spades in this very complicated and complex area of access to reliable and affordable energy supply. We've accepted 49 out of 50 of the Finkel recommendations, which will actually see us being able to work with the regulators and state and territory counterparts to ensure that our National Energy Market is functioning for all and ensuring that there is competition throughout the market, which will ensure lower prices at the end of the day. We've legislated to abolish the limited merits review process for networking businesses. We've got the ACCC looking at competition policy, because we know that there is a lack of competition within the energy market. Their interim report showed it. We are looking forward to some recommendations when they bring down their final report into what things we can do to get greater competition. We've been able to stop the gaming that was going on around poles and wires. We've suggested that certain state governments who own that infrastructure not take the cream off the top and actually give their own citizens fair access to power prices. We're also working through the COAG Energy Council. We've got the Australian domestic gas security mechanism.

With this particular conundrum, you don't just pull a lever and it all happens. You don't build solar farms all over inland Australia and suddenly have this renewable energy source. That is not how it works. That is how South Australia got into the situation it did. AEMO brought down their report that says my home state, the manufacturing state, will have a 43 per cent chance of a blackout this summer if we keep doing things the same and pursuing policies that, at the end of the day, don't deliver what we need, which is access to reliable and affordable power. We on this side of the chamber know what the impact is of increased energy prices. It's simple; the impact is on jobs. It is on the jobs of working men and women across this country—mums and dads and small business enterprises.

I just want to mention the defence industry, and I note the Minister for Defence is in the chamber. Twenty-five thousand Australians are employed in the defence manufacturing sector. It's a high-tech, future-looking industry which we are building right now. But, when I was speaking at the New South Wales conference of small to medium enterprises engaged in the defence manufacturing sector, the No. 1 concern mentioned by Chris Jenkins was the cost of energy to these businesses. It was having a direct impact on their competitiveness overseas and also on their ability to continue to grow and to employ local Australians in jobs.

I'm a National Party senator, and I cannot come to this energy debate without talking about our $62 billion agricultural industry and our food-processing industry. These are key drivers of our national economy, and in the regions they're our heart and soul. There are 320,000 jobs in the food-processing sector. We know that the increasing energy costs are going to cause agriculture to contract by up to $4.5 billion, and the food-processing sector conducted a study that said it would lose nearly 15,000 jobs simply as a result of increased energy prices. Contrary to those opposite saying the manufacturing sector is contracting, this is a sector which can grow, which wants to grow and which has the nous and the drive to grow, but it cannot when its primary input cost is exponentially increasing year on year.

I just want to touch briefly on one industry very dear to my heart as a Victorian National Party senator, and that's our $13 billion dairy industry, employing 43,000 Australians right across the country. I spoke at a dairy industry meeting a couple of weeks ago, and again high energy costs came to the fore. They are impacting our jobs and our ability to export and to ensure that these businesses are sustainable. When you're producing milk, you've got the farm where you produce the milk, where there's a high energy cost, and you've got the processing of that milk, another high-energy process. For dairy processors, their energy costs around $170 million a year. We are going to see that increase by 50 to 70 per cent this year, another $100 million for our milk processors to simply take what the cows produce in a very natural way and to make sure it's available on the shelves of our supermarkets and our restaurants. Another $100 million equates to an additional 1c a litre per year, or 15 grand for every dairy farmer in this country. That's how much they're going to lose as a result of doing nothing in this space. That is unacceptable.

In terms of on-farm costs, for our individual dairy farmers on the 5,800 dairy farms across this country, we've got a 20 per cent issue around their energy costs. We've got their sheds, the milk vats and the cooling systems they have in place on farm to keep the product fresh. We've got the irrigation pumps, particularly in north central Victoria, where our dairy industry relies on the irrigation sector. The on-farm costs of energy looking forward over this next year are an additional $4,800 per farm for this year. So that's nearly 20 grand for every single farmer when you put the increased costs of processing onto the increased cost of production from simply doing nothing and allowing energy prices to continue as they have and as they've been modelled to do.

It is unacceptable. It's a handbrake on our growth and development, and where that will be most felt will be in the regions. The highly energy-intensive industries are located in regional Australia, and it is those people who will be feeling the impact of those job losses. We can very glibly just shoot off a thousand here and 17,000 people losing their jobs there. Those are actual mums and dads. It is kitchen table stuff—people losing their jobs. It is unacceptable, because we stand here and, as Senator Dastyari said, pursue ideology over a practical response that sees the whole mix up for discussion and on the table. I would implore those senators here who care about Australian families, about a vibrant manufacturing industry and about the 950,000 Australians employed in that industry and the 43,000 Australians employed in the dairy industry to consider a pragmatic, practical approach which, yes, looks at renewables but also ensures there's reliability within the national energy system and electricity market that drives costs down and increases competition so that we can have a vibrant manufacturing sector going forward into the 21st century. It's what we're doing as a government. Please support us.

Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

It's not a bad place to pick up the debate. Senator McKenzie has argued for a practical approach to energy policy grounded in facts—I think the facts mightn't be a bad place to start. The whole premise of the debate set out by those thought leaders from One Nation is that we have to choose between dealing with climate change and having a manufacturing industry. They're just wrong. They're wrong about this, as they are about many other things. This particular proposition is particularly irritating, because it's not grounded in any facts whatsoever. Bloomberg New Energy Finance—they're the people you might commonly look to in the market for a market-led assessment of what's viable in energy investment—state that the levelised cost of energy of new ultra supercritical coal in Australia will cost between $134 and $203 a megawatt hour. They are very big numbers if people are seriously contemplating investing in new coal-fired energy. By contrast, they put solar at between $78 and $140 a megawatt hour, new-build wind at between $61 and $118 and combined cycle gas at between $74 and $90 a megawatt hour. They sensibly make the observation that new coal is not a viable solution for the pressing need that we have in the energy market, which is to replace our ageing infrastructure. Bloomberg further consider the fact that when you are looking to invest in these very carbon-intensive industries there are real risks—reputational risks, financing risks, regulatory risks—associated with the very high carbon emissions that come from these technologies. They go on to say that even if the government were to completely de-risk coal by paying for the whole plant and guaranteeing an exemption from any future liabilities the lowest levelised cost of energy that could be achieved is $94 a megawatt hour, well above solar, gas or wind.

These are the facts on the ground that the ideological advocates for new coal, sitting mostly up in that back corner of the chamber, need to contend with. Their assertion that this will present a cheap alternative is simply not true. It's simply not true and it's a mark of how far the debate has descended in the coalition party room that the people peddling these untruths are allowed to continue to lead the debate while the more moderate voices sit silently. I do note that every time one of these debates takes place in the Senate, we never hear from the moderate voices. We never hear from the cabinet ministers. We just hear from the people who have no commitment to facts, who are simply committed to repeating the ideological and untrue proposition that new coal-fired power presents any solution whatsoever to Australia's energy problems.

Bloomberg also engaged, earlier this year, in a wide-ranging speech with some of the propositions around reliability and the characteristics of coal that are said to make it so important for maintaining stability and reliability in the NEM. They say we can no longer accept the assertion that coal's base-load characteristics make it inherently more desirable. They say:

In the grid of the not-too-distant future coal’s baseload operation becomes a curse, not a blessing.

The fundamental control paradigm of grids is changing from base load and peak to forecast and balance. The balancing component will require more flexible or firming capacity, not base-load. Gas-fired generation is much better suited to providing the flexibility to this system than coal and it can provide it at a much lower cost.

This group of people up in the back corner of the chamber, in One Nation and the National Party, are living in the past. They are not engaging with the reality of new energy technologies; they are not engaging with the reality of the NEM. They are propagating, essentially, a kind of culture war around energy, where the facts matter much less than what, for them, has become a kind of cultural significance of coal, a cultural attachment to coal. That'd all be very touching and sweet if it weren't being allowed, by the weakness of this Prime Minister, to drag the entire national debate off course.

The thing is that it's not just One Nation proposing new build in coal; it's also Senator Canavan, newly returned to the front bench of this government. He was up again today talking about it and citing, in support of his arguments, a report produced by the Queensland government that, he alleges, supports his ideas. I've done a bit of checking on that, and it is true that the Queensland government engaged a consultant to look at all of the options. That's a sensible thing to do, right? If you're the department and someone's put up a proposition about new coal-fired generation in North Queensland, you might want to go and have a look.

What did they find? They found that an ultra-supercritical coal power station in North Queensland would only be viable under sustained high wholesale energy prices over the 40-year life of the plant, where the wholesale price is maintained at $75 per megawatt hour. They also found that if you introduce a carbon price, say $40 a tonne, the whole thing becomes completely unviable. They highlighted that there are significant risks associated with the development of such a plant, including a real risk that it would become stranded, a white elephant, during changing market conditions. It would be highly exposed to the introduction of a federal carbon price, and this would inhibit the ability for any such plant to obtain finance and maintain value over the life of the plant. It doesn't sound like a good investment to me, not even a little bit. But that is the proposition that One Nation is taking to the election, and, from the sound of it, that is the proposition that the LNP is putting to Queenslanders.

The sad truth is that we are in the midst of an energy crisis, and it is entirely the making of this government. Our investors in the energy sector have been crying out for stability. They have come before committee after committee, review after review, and they've said, 'What we need is a clear set of investment guidelines that are realistically aligned to the carbon reduction task that the global community will expect us to perform.' And they've been waiting for a set of settings just like that for four years, from this government. The truth is that, under the previous Labor government, we did have a clear framework in place to manage the National Electricity Market and reduce carbon, and, in a fit of pique and through a series of entirely opportunistic decisions, the whole thing was dismantled under Mr Abbott.

The coalition have been crab walking sideways towards re-establishing something since they realised the scale of the catastrophe they created. Mr Turnbull—who previously, as we all know, supported emissions trading—kind of floated, through Mr Frydenberg, the idea of an emissions intensity scheme, but that lasted a full 24 hours before it was knocked over by the dinosaurs in the hard Right of the party room. They then fiddled around for a while with Mr Finkel's report, and he, helpfully, tried to support the government by coming up with a clean energy target. That was something that everybody thought was entirely sensible as well, but it couldn't survive the coalition party room. They then came back again for a third go, with a proposition called the NEG, the National Energy Guarantee, which appears to be something that was cooked up in the space of five or six weeks by the Energy Security Board and constitutes an eight-page letter containing a set of ideas to be referred to COAG. This is the sum total of the energy debate in the four years that the government has had to consider this issue and to resolve the pressing investment questions that are facing the sector. There's no point coming in here and bleating about manufacturing and high energy prices if you're sitting over there. If you've been sitting over there and providing support to this government day after day in this chamber, you have to take responsibility for the decisions that they've taken—and the decisions they've taken are precisely none. This is a government entirely paralysed by its own divisions, and it is failing Australia.

Question agreed to.